Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
REPORT ON THE LENGTH OF TIME EMPLOYEES SPEND ON
THE NATIONAL MINIMUM WAGE
2019
January 2019
LPC NO. 11 (2019)
Three Year Report
(2015-2018)
Contents
Chairman’s Preface
1
2
Overview
Work of the Commission 2015-2018
1
5
3
4
Impact of Recommendations
Conclusion
11
14
Chairman’s Preface
The Low Pay Commission (LPC) was established in 2015 in order that an evidence-based
approach might be taken to the setting of the National Minimum Wage (NMW). The
Commission came into being at a time when Ireland was beginning to emerge from one of
the worst economic recessions in its history. During the recession, the rate of the National
Minimum Wage had remained unadjusted since 2011. During the first term of office of the
LPC (2015-2018), it recommended total increases in the NMW amounting to €1.15, or
13.3%.
When the Commission began its work there were significant data gaps relating to low pay in
Ireland. There have been significant improvements in the data but work still remains to be
done. I wish to thank the CSO for working with us to make improvements in this area. I also
wish to thank the ESRI for their research which has greatly assisted the Commission in its
work. I am also grateful to the Revenue Commissioners for the research they completed
based on their data.
I would like to take this opportunity to extend my thanks to the members of the first Low Pay
Commission and commend them on all of their work over the past three years. In particular I
would like to extend my thanks to the three members of the Commission, Caroline McEnery,
Edel McGinley and Professor Donal O’Neill, who are not returning for a second term. Each
of them brought unique skills and expertise to the LPC and their contribution to the work of
the Commission was greatly appreciated.
1
Chapter 1 Overview
Our Brief
The Low Pay Commission was established under the National Minimum Wage (Low Pay
Commission) Act 2015. The primary remit of the Commission is to make annual
recommendations to Government on the appropriate rate of the National Minimum Wage
using an evidence-based approach. It is also a stipulation of the Act that:
“The Commission shall once every three years report generally on the operation of this Act
and, in particular, on the impact of any orders made under section 10D on low pay, income
distribution and employment costs.”
This report reviews the operations of the first Low Pay Commission for its term of office from
2015-2018. The report provides a background to the Commission, its membership and
composition, work undertaken by the Commission during its first three year term and the
impact of its recommendations on a range of economic factors.
Background
Under the legislation establishing the Low Pay Commission, the National Minimum Wage
(Low Pay Commission) Act 2015, the duty of the Commission is determined as being to:
“… make recommendations to the Minister regarding the national minimum hourly rate
of pay that—
(a) is designed to assist as many low paid workers as is reasonably practicable,
(b) is set at a rate that is both fair and sustainable,
(c) where adjustment is appropriate, is adjusted incrementally, and
(d) over time, is progressively increased,
without creating significant adverse consequences for employment or competitiveness.”
2
Our remit, and the legislation, require that the Commission give consideration to a range of
issues in coming to a decision on a recommendation to the Minister for an appropriate rate
for the minimum wage. Some of the issues are, essentially, matters of fact, while others
necessitate an element of assessment and appraisal, and considered judgement.
The particular issues the Commission is obliged to have regard to in considering its
recommendation are —
(a) changes in earnings during the relevant period,
(b) changes in currency exchange rates during the relevant period,
(c) changes in income distribution during the relevant period,
(d) whether during the relevant period—
(i) unemployment has been increasing or decreasing,
(ii) employment has been increasing or decreasing, and
(iii) productivity has been increasing or decreasing,
both generally and in the sectors most affected by the making of an order,
(e) international comparisons, particularly with Great Britain and Northern Ireland,
(f) the need for job creation, and
(g) the likely effect that any proposed order will have on —
(i) levels of employment and unemployment,
(ii) the cost of living, and
(iii) national competitiveness.
The legislation requires the Commission, in making its recommendation, to have regard to
these factors in the period since the most recent making of a National Minimum Wage Order.
The remit of the Low Pay Commission (LPC) is to recommend levels for the minimum wage
rates that will help as many low-paid workers as possible without any significant adverse
impact on employment or the economy. The advice the LPC offers the Government to
achieve this aim is based on the best available evidence.
Members of the Commission 2015-2018
The Commission comprises eight members and an independent Chairperson. There are
three members who have an understanding of the interests of employers, particularly small
3
to medium-sized employers and those operating in traditionally low paid sectors, and who
possess a good knowledge and understanding of the particular issues faced by Irish
businesses, particularly in relation to labour costs, and competitiveness. There are three
members who have an understanding of the interests of employees, particularly the impact
of living on the minimum wage and the sectors where low pay and minimum wage workers
are concentrated. There are also two academics that have particular knowledge and
expertise in relation to economics, labour market economics, statistics, and employment law,
as well as proven competence in analysing and evaluating economic research and statistical
analysis.
The term of office of a member of the Commission is three years from the date of
appointment. The first Commission served from 16th July 2015 to 15th July 2018. A person
may not be a member of the Commission for more than two consecutive terms of office but
is otherwise eligible for re-appointment. The members who served on the first Low Pay
Commission are listed below.
Commission Members
Dr. Donal de Buitléir Chairperson
Mr. Vincent Jennings Chief Executive Officer, Convenience Stores and
Newsagents Association
Ms. Patricia King General Secretary of ICTU
Mr. Gerry Light Assistant General Secretary, Mandate Trade Union
Ms. Caroline McEnery Director, The HR Suite; HR & Business Solutions
Ms. Edel McGinley Director, Migrant Rights Centre Ireland
Ms. Mary Mosse Former Lecturer in Economics, School of Business,
Waterford Institute of Technology
Mr. Tom Noonan Former Chief Executive, The Maxol Group, President
of IBEC (2008-2010)
Professor Donal
O’Neill
Department of Economics, Finance and Accounting,
NUI, Maynooth
4
Attendance by Members at Low Pay Commission Meetings
Between 2015 and June 2018 there were 28 meetings of the Low Pay Commission held.
The attendance by each member of the Commission is outlined below.
Members Name Meetings Attended
Donal de Buitléir 27
Vincent Jennings 27
Patricia King 25
Gerry Light 23
Caroline McEnery 25
Edel McGinley 25
Mary Mosse 26
Tom Noonan 23
Donal O'Neill 23
Support to the Commission
The Commission has a small secretariat which drafts its reports, arranges meetings,
administers its budget and finances and oversees research and data collection. The
secretariat also serves as the liaison with the Department under whose aegis the
Commission operates (the Department of Jobs, Enterprise and Employment for the period
2015 to September 2017 and since then the Department of Employment Affairs & Social
Protection). The secretariat provides input to the business of the Department when required
in the form of data and information for parliamentary questions, memos to Government,
briefing material and financial audits. Particular thanks are due to the secretariat, ably led
since the Commission’s establishment by Principal Officer, Maire Ni Chuirc, for supporting
our work most effectively and efficiently.
Finance and Budget
The budget for the Commission is provided by the Department of Employment Affairs and
Social Protection. The Commission’s annual expenditure has ranged between €250,000
and €300,000 over the three years.
5
Pay
The pay budget component covers both members’ fees, paid on a quarterly basis, and
salaries of the secretariat staff (see below). The payment of member’s fees has been lower
than anticipated for this Commission as two members (Gerry Light and Patricia King) opted
not to receive fees for the period and one was ineligible under the Department of Public
Expenditure and Reform’s ‘one person one salary principle’ (Professor Donal O’Neill).
Total in fees paid to LPC Members: €297,954 (2015-2018)*
Chairperson of the Commission: €20,520 per annum
Member of the Commission: €11,970 per annum
Pay for the secretariat has fluctuated somewhat throughout the period as a result of staff
changes.
Non-Pay
The Commission’s non pay budget component is used to fund the Commission’s research
partnerships and projects as well as the day to day administration of the Commission.
A breakdown of the Commissions expenditure since its establishment is set out below:
Expenditure Item 2015* 2016 2017 2018
Salaries €94,000 €150,000 €112,000 €149,200
Fees €61,400 €81,000 €60,000 €75,300
Research €75,000 €55,000 €84,000 €55,000
Administration* €20,300 €21,000 €15,000 €27,600
Total €250,700 €307,000 €271,000 €307,100
of which:
Pay €155,400 €231,000 €172,000 €224,500
Non-Pay €95,300 €76,000 €99,000 €82,600
*This includes payments during the Commission’s interim period of operations from February 2015.
The first full year of operation was 2016.
6
Chapter 2 Work of the Commission 2015-2018
Research
Upon the establishment of the Low Pay Commission, it was noted that there were significant
gaps in the data which would ideally be available to the LPC to assist it in coming to a
recommendation on the appropriate level of the national minimum wage. The LPC indicated
that it would seek to address this issue over the coming years. In this regard, the LPC put in
place a research partnership with the Economic and Social Research Institute (ESRI) and
have worked with them to develop research projects in order to address gaps in the existing
data.
In addition to research produced by the partnership, the Commission has sought the
assistance of Government Departments and bodies to improve the data available to it. A
major initiative undertaken by the Commission was to request the Central Statistics Office
(CSO) to include a pilot question on the National Minimum Wage in the Quarterly National
Household Survey (QNHS), now the Labour Force Survey (LFS). The minimum wage
question was introduced to the QNHS in Q2 2016 and the first results were released in April
2017. This survey produces data for the Commission as to the numbers of people impacted
by the National Minimum Wage, as well as certain worker characteristics (age, gender,
nationality, sector of employment etc.). The Commission has also stressed to the CSO the
vital importance of undertaking a survey similar to the National Employment Survey (NES),
which was discontinued in 2009. This survey would provide a rich source of useful data for
the LPC on firm level profitability and low pay employment. The CSO has confirmed to the
Commission that they will be undertaking an NES again, the current plan being to publish in
Autumn 2020.
The Revenue Commissioners have also provided assistance to the Commission and in 2017
produced a report, “Analysis of Low Income Taxpayers and Employer Profitability: Evidence
from Tax Records”. This report added to the Commission’s understanding of the relationship
between employer profitability and low pay.
The Commission is committed to continuing to develop positive relationships with any bodies
that can help to improve the data available to it. The Commission is always cognisant of the
fact that high quality data is absolutely essential so that it can make its evidence-based
recommendations.
7
LPC/ESRI Partnership
The LPC/ESRI partnership, which commenced in December 2015, and is due to run until
December 2018, has produced the following research pieces during the life of the
partnership:
A review of International Literature on Minimum Wages: this review examined
international academic literature on minimum wages over the previous 12 months
and was included in the appendix of the Commission’s reports in 2016 and 2017.
A study of Sub-Minimum Wage rates for Young People: This report by the ESRI
provided an overview of sub-minimum wage rates for young people both in terms of
incidence and impact. The ESRI found that over two-thirds of OECD countries have
statutory minimum wages and that just under two-thirds of these have special rates
for young people. This report played a significant role in informing the Commission’s
recommendations to Government on the sub-minima rates of the National Minimum
Wage.
A study of Minimum Wage Employment in Ireland: The role of worker, household
and job characteristics: This study used Irish data from the Survey of Income and
Living Conditions (SILC) to examine the factors underlying differences in the relative
risk of being in receipt of the National Minimum Wage (NMW) among groups with
relatively high rates of exposure to NMW employment, such as females, young
people and non-Irish nationals. The results for Ireland were then compared with the
UK. The study attempted to identify the factors driving a higher propensity of
minimum wage employment among specific groups. The research aimed to
understand the degree to which the likelihood of minimum wage employment is
driven by factors such as personal characteristics (like education and experience),
job conditions within particular occupations or factors related to household
composition and caring responsibilities.
A scoping study on the feasibility of measuring the relationship between low
pay and profitability in Ireland: The Commission has been eager since its inception
to develop a greater understanding of the relationship between low pay and firm level
profitability. This scoping paper examined available data sources and concluded that
the required data sets are not currently available in Ireland to undertake such an
examination. It set out what data would need to be collected and made available for
such a study to be attempted.
8
Estimating the Effect of an Increase in the Minimum Wage on Hours Worked and
Employment in Ireland: On 1st January 2016, the NMW increased by 50 cent from
€8.65 to €9.15. Using data from the Quarterly National Household Survey (QNHS)
for the years 2015 and 2016, the ESRI estimated the effect of the increase in the
minimum wage on hours worked and the likelihood of job losses among low-paid
workers using a difference in difference estimator. This data was further updated for
the increase in the NMW of 10 cent from €9.15 to €9.25 on 1 January 2017.
An Examination of the Labour Market Transitions of Minimum Wage Workers in
Ireland: This study used a new measure of minimum wage employment in Ireland,
taken from the QNHS, to assess the degree to which individuals in receipt of the
NMW transition in and out of NMW employment, over a period of three quarters in
2016 and 2017.
The Impact of a change in the National Minimum Wage on the distribution of
hourly wages in Ireland: In this study the ESRI investigated the effect of the 2016
increase in the NMW (from €8.65 to €9.15) on the distribution of hourly wages. The
results showed clear impacts centred around the new minimum wage levels for all
workers and separately for males, females and young people.
Steering Committee
During the first term of the Commission the ESRI partnership was governed by a Steering
Committee, comprising two members of the Commission, two senior members of the ESRI,
and an independent member from the CSO. The Steering Committee was established in
January 2016 and was chaired by Mary Mosse. The Committee met three times in 2016,
twice in 2017 and three times in 2018.
The Steering Committee provided high-level oversight of the partnership and determined the
work-plan for the programme, including the topics and time-lines of the projects.
Steering Group Members
Mary Mosse, LPC (Chair)
Donal O’Neill, LPC
Seamus McGuinness, ESRI
Helen Russell, ESRI
Brian Ring, CSO
9
Consultation Process
For each of its annual reports, the Commission has undertaken a consultation process in
which it has sought to hear the views of employer groups, unions, employee representative
groups and individual employers and employees on the appropriate rate of the National
Minimum Wage. Consultation processes have also been undertaken for reports on the sub-
minima rates of the National Minimum Wage, the preponderance of women on the National
Minimum Wage and the allowances provided for board and lodgings under the National
Minimum Wage. During the course of these campaigns the Commission has taken out
advertisements in print and digital media and run radio advertisements in both local and
national radio.
As part of the consultation process the Commission has also organised oral hearings where
those who have made submissions and members of the public meet with the Commission
for question and answer sessions. To date the Commission has held such meetings in
Monaghan, Galway and Kerry, and in Dublin.
Meetings
In total, the Commission met on 28 occasions during its first term. These meetings are used
to draft reports, review data and statistics and finalise recommendations. In 2017 and 2018
the Commission hosted a research day in which individuals or organisations which have
produced research in areas which the Commission deems relevant to its work have been
invited to present papers and engage in a questions and answers session with the members.
The Commission has also sought to develop relationships with bodies engaged in setting the
minimum wage in other countries in an effort to share knowledge and review other systems.
To this end the Commission has met on several occasions with representatives of the United
Kingdom Low Pay Commission and also had discussions with representatives of the
Australian Fair Work Commission, the German and French Minimum Wage Commissions.
Reports and Recommendations
The Commission has produced the following reports on the appropriate rate of the National
Minimum Wage:
1) Recommendations for the National Minimum Wage (2016) – A majority of the
Commission members recommended increasing the NMW by 50 cent from €8.65 to
€9.15. The members opposed to this recommendation produced minority reports
outlining the reasons for their opposition. The Government accepted the Commission’s
10
recommendations and the new rate took effect from 1 January 2016. This represented
the first increase in the NMW since July 2011.
2) Recommendations for the National Minimum Wage (2017) – A majority of the
Commission members recommended increasing the NMW by 10 cent from €9.15 to
€9.25 per hour. The members opposed to this recommendation produced minority
reports outlining the reasons for their opposition. The Government accepted the
Commission’s recommendations and the new rate took effect from 1 January 2017.
3) Recommendations for the National Minimum Wage (2018) – A majority of the
Commission members recommended increasing the NMW by 30 cent from €9.25 per
hour to €9.55 per hour. The members opposed to this recommendation produced
minority reports outlining the reasons for their opposition. The Government accepted
the Commission’s recommendation and the new rate took effect from 1 January 2018.
4) Recommendations for the National Minimum Wage (2019) – The members of the
Commission unanimously supported increasing the NMW by 25 cent to €9.80. The
Government accepted the Commission’s recommendation and the new rate took effect
from 1 January 2019.
Since its establishment the Commission has recommended increases in the National
Minimum wage of €1.15 from €8.65 to €9.80 per hour. This represents an increase of
13.3%. According to the most recent data available from Eurostat, Ireland currently has the
second highest National Minimum Wage in Europe. When purchasing power standards are
taken into account Ireland ranks 6th in Europe.
Adjustments to the NMW on foot of LPC recommendations
Date Rate Increase in NMW % Increase
July 2011* €8.65 - -
January 2016 €9.15 €0.50 5.8%
January 2017 €9.25 €0.10 1.1%
January 2018 €9.55 €0.30 3.2%
January 2019 €9.80 €0.25 2.6%
*Last rate adjustment before the establishment of the Low Pay Commission
11
Related Matters
In addition the Commission has, at the request of the Minister, examined and reported on
the following related matters:
5) The preponderance of women on the National Minimum Wage – The Commission
was asked, as part of its 2016 work programme, to examine the underlying reasons
behind the preponderance of women on the NMW (approximately 54% of NMW workers
are female according to the latest available data). The Commission concluded that
based on all available evidence, roughly one third of the imbalance could be attributed
to caring responsibilities.
6) Report on the Sub-minima rates of the National Minimum Wage (Part 1) – The
Commission reviewed the sub-minima (special training and youth rates) of the minimum
wage as part of its 2016 work programme. At the time, no data was available as to how
many people were impacted by the sub-minima rates. The Commission therefore chose
to delay making its recommendations until this data was available from the QHNS.
7) The Allowances provided for Board and Lodgings under the National Minimum
Wage – The Commission reported its views and recommendations on the allowances
provided for board (food) and lodgings (accommodation) in May 2017. The allowances
had remained unchanged since their introduction as part of the National Minimum Wage
in 2000. The Commission recommended moving the method of calculation for board
from a weekly/daily rate to an hourly rate. This recommendation was accepted by the
Government and implemented as part of Budget 2018.
8) Report on the Sub-minima rates of the National Minimum Wage (Part 2) – Having
received data from the CSO QNHS in April 2017 relating to the number of employees
impacted by the sub-minima rates of the National Minimum Wage, the Commission
submitted part 2 of its report on the matter to Government in December 2017. The
Commission’s recommendations were to abolish the trainee rates, and simplify the
youth rates by moving from experience-related to age-based rates. These
recommendations were accepted by Government and have been brought into law
through an amendment to the Minimum Wage legislation incorporated in the
Employment Rights (Miscellaneous Provisions) Act 2018. It is anticipated that the
provision will be commenced in early March 2019.
12
9) The Length of time employees spend on the National Minimum Wage – The
Commission submitted its report into the length of time employees spend on the NMW
in March 2018. The report was significantly restricted by the lack of accurate data
available to the Commission on which to base its conclusions and recommendations.
The Commission nonetheless did conclude that while the majority of employees move
beyond the NMW within a year, a significant cohort remain on the NMW for a prolonged
period of time.
13
Chapter 3 Impact of Recommendations
Under the terms of the National Minimum Wage (Low Pay Commission) Act 2015 it is a
requirement that:
“The Commission shall once every 3 years report generally on the operations of this Act and,
in particular, on the impact of any orders made under 10D on low pay, income distribution
and employment costs.”
The impact of NMW orders on each of the above will be examined in this chapter:
Low Pay
In order to gain a better understanding of the impact of the Commission’s recommendations
on low pay, the Commission requested the ESRI to examine the matter as part of its
research partnership. Using SILC data for 2015 and 2016, the ESRI examined the impact of
the change in the NMW on the distribution of earnings and inequality in Ireland. To do this
they constructed a counterfactual wage distribution, which is an estimate of what the wage
distribution would have looked like in 2016, in the absence of a minimum wage increase. By
comparing the counterfactual distribution to the actual 2016 distribution, they were able to
isolate the part of the wage distribution most affected by the minimum wage change.
The ESRI released its report on the topic, “The Impact of a Change in the National Minimum
Wage on the Distribution of Hourly Wages in Ireland”, in July 2018. In the report they
estimate that the increase in the minimum wage resulted in a two percent increase in the
average hourly wage of workers earning between €6.50 and €11.50 per hour. The impacted
wage range, i.e. those earning between €6.50 and €11.50, accounts for approximately the
bottom 25 percent of the wage distribution.
The report estimates that in the absence of a NMW change, approximately 8.2 percent of
male employees in 2016 would have earned on or below €9.15 per hour. However, following
the NMW change, just 4.5 percent of male workers had an hourly wage in this range. Spill-
over effects were also observed across different subgroups of workers. In 2016, the
average male wage in the €7.50 to €11.00 range was €9.92 per hour, whereas in the
absence of a minimum wage change, this would have been €9.69 per hour, thereby
indicating that the minimum wage change increased the average male wage in this range by
2.3 percent.
14
The effect of the NMW increase for females was found to be similar to that of males.
Following the NMW increase, 5.4 percent of females earned below €9.15 per hour compared
to 9.9 percent if the NMW had not been increased. The NMW change also had a statistically
significant effect on females earning in the range €6.50 to €11 per hour. While the average
wage in 2016 was €9.82 per hour, it would have been €9.72 (1.2 percent lower) in the
absence of a minimum wage change.
The report also allows us to gauge the impact of the NMW increase on young workers
(defined as those aged 25 years or less). In 2016, approximately 17 percent of young
workers earned €9.15 or less. However, the ESRI estimates that in the absence of a
minimum wage change this would have been approximately 27 percent. However, there are
fewer spill-over effects for young workers. The wage range in which the ESRI observed a
statistically significant effect is concentrated between €6.50 and €9.50. The average wage
in this range was €8.90 per hour. In the absence of an NMW change this would have been
€8.59 per hour, approximately 3.5 percent lower.
Income Distribution
The research carried out by the ESRI also allows the Commission to assess the extent to
which its recommendations have impacted on the income distribution in Ireland. The results
of the ESRI research study indicate that without the minimum wage change, approximately
10 percent of workers in 2016 would have earned on or below €9.15 per hour. However,
following the increase in the minimum wage, just 6 percent of workers had an hourly wage in
this range. Therefore, the minimum wage change resulted in a four percentage point
reduction in the number of workers earning on or below €9.15 per hour.
In terms of wage inequality, the ESRI assessed the impact of the NMW change on wage
dispersion by comparing the ratio of hourly wages of workers in the 90th and 10th percentiles
and also the 75th and 25th percentiles. The ESRI paper1 sets out its results in this area:
“In 2016 the P75/P25 was 2.17, indicating that the hourly wage of those in the 75th percentile
was 2.17 times greater than those in the 25th percentile. The P75/P25 from our
counterfactual distribution was higher at 2.25. This suggests that P75/P25 inequality would
have been slightly higher without the increase in the minimum wage. Using this particular
1 McGuinness, S., Redmond, P. (2018) The Impact of a change in the National Minimum Wage on
the distribution of hourly wages in Ireland, ESRI.
15
metric, inequality fell by approximately four percent as a consequence of the 2016 NMW
increase. Likewise, our P90/P10 estimate in 2016 was 3.68, versus 3.98 for the
counterfactual distribution, again indicating that the minimum wage increase was associated
with a reduction in hourly wage inequality, this time in the order of eight percent using this
metric. Therefore, our results suggest that the introduction of the 2016 NMW rate change
resulted in a decrease in wage inequality.”
Employment Costs
The Commission requested, as part of its research partnership agreement with the ESRI,
that an examination be carried out regarding firm level profitability and low pay. An ESRI
scoping paper on the matter concluded that the data sets are not currently available in
Ireland to allow the relationship between low pay and profitability to be reliably assessed.
The ESRI further stated in its scoping paper that linked employer-employee data is available
in many European countries which provides current information on earnings and facilitates
research on a wide range of policy relevant areas. In the light of the enactment of data
protection regulation, which can make access to data difficult, the Commission would urge
both the CSO and the Data Protection Commissioner to take any necessary measures to
ensure that relevant data sources are commissioned and can be made available to
researchers in Ireland in order to ensure that appropriate studies can be carried out and the
impact of decisions properly assessed.
16
Chapter 4 Conclusion
As the first term of the Low Pay Commission concludes, this report fulfils the statutory
obligation to report on the work of the Commission over its first three years. Completing this
report has provided an invaluable opportunity for the members to examine the work
undertaken by the Commission thus far. It has also allowed the members an opportunity to
look to the future and to consider how the lessons learnt over the last three years can
contribute to making the LPC a more effective body over the coming years.
Over the course of its three year history, the Low Pay Commission has made four
recommendations to Government to increase the national minimum wage, the total
increases amounting to €1.15, or 13.3%. The Government has accepted all of the LPC’s
recommendations. It is noteworthy that the 2019 NMW increase was recommended
unanimously by all members of the Commission for the first time.
In addition, the Commission has been asked to examine other related matters and has
presented reports to Government on matters such as the Sub Minimum Rates of the NMW
(reduced age-based rates and rates that apply to trainees), the Preponderance of Women
on the NMW, and the allowances provided for Board and Lodgings under the NMW.
The Commission is committed to its evidence-based approach to making recommendations
to Government and in this context has worked hard to access high-quality data sources.
The Commission has worked closely with the Central Statistics Office to improve minimum
wage specific data availability and will continue to work closely with the CSO and any other
bodies that can assist it over the coming years.
The Commission put in place a research partnership with the ESRI in 2015 and it has
yielded a number of high-quality reports on matters related to the minimum wage and low
pay in general. These reports have been pivotal in improving the knowledge base of the
Commission and informing its deliberative process.
From the outset, the Commission has been aware of the importance of engaging with all
stakeholders interested in its work. In this context, the annual consultation process is an
important part of the decision-making process for the members and has proved to be an
immensely constructive and enlightening undertaking
17
The Commission is very cognisant of the need to ensure compliance with NMW legislation
and in this context has twice recommended that provision should be made for the display of
basic entitlements in all places of employment where the minimum wage is in operation.
In 2017 & 2018, the Commission also highlighted the PRSI anomaly created by the sudden
increase in the rate of employers’ PRSI from 8.6% to 10.85% on weekly earnings of €376.
The Government responded to the LPC’s recommendation and increased the PRSI
threshold to €386 in Budget 2019. The LPC will continue to monitor this anomaly closely.
The Commission is looking forward to continuing its work whilst benefiting from the
experience it has gained in its first term. The LPC is committed to exploring new research
areas, to continually improve its consultation process, to finding new data sources, and to
always seeking new and improved ways of bringing informed recommendations relating to
the national minimum wage and related matters to Government.
List of Reports produced by the Low Pay
Commission – July 2015 to July 2018
1. Recommendations for the National Minimum Wage, LPC No. 1 (2015)
2. Recommendations for the National Minimum Wage, LPC No. 2 (2016)
3. Report on the Sub-minima rates of the National Minimum Wage (Part 1),
LPC No.3 (2016)
4. The preponderance of women on the National Minimum Wage, LPC No.4
(2016)
5. The Allowances provided for Board and Lodgings under the National
Minimum Wage, LPC No. 5 (2017)
6. Recommendations for the National Minimum Wage, LPC No. 6 (2017)
7. Report on the Sub-minima rates of the National Minimum Wage (Part 2),
LPC No. 7 (2017)
8. The Length of time employees spend on the National Minimum Wage, LPC
No. 8 (2018)
9. Recommendations for the National Minimum Wage, LPC No. 9 (2018)
January 2019
LPC NO. 11
(2019)